The European Union has confirmed it is investigating Apple’s decision to close Epic Games’ developer account, citing three separate regulations that may apply.
Yesterday, the Fortress Heroes maker revealed that Apple had terminated the account, apparently reversing its decision to approve a developer account last month.
Epic originally planned to launch its own app store, Epic Games Stores, on iOS in Europe and relaunch Fortnight on Apple platforms. It also accused Apple of violating the EU’s Digital Markets Act (DMA) by closing its developer account.
In response to this development, a spokesperson for the European Commission told TechCrunch that it has “requested further explanation from Apple under the DMA”.
The pan-EU regulations come into effect for Apple from midnight Brussels time today.
The spokesperson also said the EU was assessing whether Apple’s actions would raise “doubts” about compliance with two other regulations – the Digital Services Act (DSA) and the Platform-to-Business Regulation (P2B) – as they would Its description is “Connection”. Designated VLOPs between Developer Program Memberships and App Stores” (aka Very Large Online Platforms).
EU DMA rules apply to Apple (as a designated “gatekeeper”) and its App Store (as a so-called “core platform service”), requiring the company to allow third-party app stores. Failure to comply with the DMA may result in significant penalties – up to 10% of annual global turnover (20% for repeat offenders).
While some of the rules in the DSA also apply to Apple’s App Store as a designated VLOP, they have been in force for larger platforms since August 2023 – since last month, the remaining provisions of the regulation have applied to platforms and more digital services . Fines for non-compliance with the DSA can range up to 6% of global annual turnover.
At the same time, the EU’s P2B regulations include measures aimed at improving platform transparency and curbing unfair practices. It has a longer validity period (from 2020).
Under P2B law, for sudden and unexpected account suspensions, platforms must provide clear reasons for termination. However, unlike the VLOP regime of DMA and DSA, P2B enforcement is not the responsibility of the committee. It is handed over to member state-level authorities, who also decide on possible penalties for non-compliance. Although Commission enforcers may consider whether a platform is well compliant with the P2B Rules as part of assessing a VLOP’s DSA compliance, as there is some overlap in scope.
Epic claims Apple terminated its developer account in retaliation for its criticism of the iPhone maker’s DMA proposal, which would have required developers to sign new terms and conditions that included new “core technologies” in order to exploit DMA rights, as ” Malicious Compliance”.
Yesterday, Apple issued an aggressive statement in response, hitting back at Epic’s accusations and citing the U.S. court ruling as reason for terminating its account. It also claimed that no senior executive reviewed Epic’s application for an Apple Developer Program license agreement, suggesting it was done through a click-through agreement.
“Epic has materially breached its contractual obligations to Apple, resulting in a court finding that Apple has the right to terminate “any or all of Epic Games’ wholly owned subsidiaries, affiliates, and/or other entities” under the control of Epic Games at any time, in Apple’s sole discretion. WHEREAS Epic’s past and current conduct, Apple has chosen to exercise this right,” Apple wrote yesterday, citing a September 2021 U.S. court ruling on Epic’s lawsuit against Apple. The game maker is suing Apple in the United States, accusing it of abusing its market power by forcing companies to use its own payment system.
In September 2021, a U.S. court ruled that Apple does not have a monopoly on digital mobile game transactions. Although it did order not to prohibit developers from adding links in their apps that direct users to purchase digital goods using alternative payment systems outside of app stores.
At the time, Apple hailed the ruling as a victory, saying the court ruled that the App Store did not violate antitrust laws. U.S. courts have also not required Apple to allow third-party app stores or sideloading. However, according to the EU’s DMA, Apple must allow third-party app stores and third-party software downloads; it must not hinder commercial users from providing goods through their own channels.
A U.S. court ruling terminating Epic’s developer accounts on Apple grounds is unlikely to have legal effect in the EU. However, Apple may be looking to use one legal jurisdiction against another – the company has identified its market power as a problem and has passed laws regulating how it operates its App Store.
We contacted Apple for a response to the European Commission’s request for further explanation of its actions under the DMA, as well as the EU’s questioning of its compliance with the DSA and other measures taken by P2B on the App Store. The company said it had nothing to add to yesterday’s remarks – a U.S. court ruling confirming its contractual right to terminate Epic accounts.
In these remarks, Apple noted that the termination of Epic accounts was not limited to the EU. It says its Developer Program License Agreement (DPLA) is a global agreement; claims Epic violated the DPLA by trying to circumvent Apple’s rules by secretly deploying code that allowed users to purchase in-game currency through its “hotfix” patch. Also implemented around the world, including in Europe; and court injunctions allowing termination are proposed to apply globally.
The company also noted that Epic continues to file lawsuits against it in the United States and Australia.
